Attached files
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| 8-K - 8-K - Ascent Capital Group, Inc. | a8-kacg32615.htm |
A S C E N T CAPITAL GROUP INC ($ in Millions) For The Quarter Ended December 31, 2014 LQA Adjusted EBITDA (1) $363.0 Steady State RMR Purchases Total Portfolio Average RMR for the 4th Quarter $43.9 Lifecycle RMR Attrition Rate (2) x 11.75% Dealer Creation Cost Multiple (3) x 35.0x Steady State RMR Purchases $180.5 Annualized Maintenance Capital Expenditures (4) $1.5 Steady State Free Cash Flow (5) $181.0 % of LQA Revenue 33.3% Robust Steady State Cash Flow Generation (1) Adjusted EBITDA for the quarter ended December 31, 2014 annualized; see Appendix for a definition and discussion of Adjusted EBITDA (2) Estimated annual RMR attrition over the life of our accounts of 11.0% – 12.5%. The Company’s RMR attrition rate has generally been lower than unit attrition due to net rate changes being positive (3) Long-run average creation cost multiple of 34x – 36x (4) Annualized maintenance capital expenditures represents estimated capital expenditures required to maintain steady-state customer base (5) See Appendix for a definition and discussion of Adjusted EBITDA and Steady State Free Cash Flow Steady state free cash flow (“SSFCF”) is intended to represent the financial productivity of the revenue generated from the portfolio of accounts over their lifecycle March 2015 • In a steady state scenario, Monitronics would generate higher margins due to lower expensed acquisition costs and reduced customer acquisition multiples (given lower volumes), neither of which have been included in the above analysis Exhibit 99.1
A S C E N T CAPITAL GROUP INC ($ in Thousands) For the Quarter Ended December 31, For the Twelve Months Ended December 31, 2014 2013 2014 2013 2012 2011 Actual Actual Actual Actual Actual Actual Net Income (Loss) ($5,009) ($14,141) ($29,717) ($16,687) ($16,776) ($6,759) Amortization of subscriber accounts, dealer network and other intangible assets 64,021 62,701 253,403 208,760 163,468 159,619 Depreciation 2,192 2,208 9,019 7,327 5,286 4,704 Stock-based compensation expense 661 654 2,068 1,779 1,384 393 Restructuring charges (17) 709 952 1,111 - - Radio Conversion Program costs (a) 312 - 1,113 - - - Security Networks acquisition related costs - - - 2,470 - - Security Networks integration related costs - 729 2,182 1,264 - - Realized/unrealized loss on derivative instruments - - - - 2,044 10,601 Refinancing costs - - - - 6,245 - Interest expense 30,203 29,820 119,607 96,145 71,405 42,698 Income tax expense (1,611) 5,098 3,600 3,081 2,619 2,564 Adjusted EBITDA $90,752 $87,778 $362,227 $305,250 $235,675 $213,820 Source: Company filings (a) Monitronics Adjusted EBITDA reported for the twelve months ended December 31, 2014 has been adjusted to exclude Radio Conversion Program costs of $441,000 and $360,000 for the three months ended June 30, 2014 and September 30, 2014, respectively. These adjustments will be reflected in future filings. No costs associated with the Radio Conversion Program were incurred prior to 2014. Monitronics generally defines Adjusted EBITDA as net income (loss) before interest, taxes, depreciation and amortization (including the amortization of subscriber accounts, dealer network and other intangible assets) and other non-cash or non-recurring charges such as acquisition related professional fees, restructuring charges and stock-based compensation. Adjusted EBITDA does not represent cash flow from operations as defined by generally accepted accounting principles, should not be construed as an alternative to net income or loss and is indicative neither of Monitronics’ results of operations nor of cash flows available to fund all of its cash needs. It is, however, a measurement Monitronics believes is useful to investors to evaluate its operating performance. Adjusted EBITDA is also a measure that Monitronics believes is customarily used by financial analysts to evaluate the financial performance of companies in the security alarm monitoring industry and is one of the financial measures, subject to adjustments, by which Monitronics’ covenants are calculated under the agreements governing its debt obligations. Monitronics also believes the measurement, Steady State Free Cash Flow, is useful to investors to understand its financial performance before the impact of expenditures for new subscribers to grow its business. Monitronics defines Steady State Free Cash Flow as Adjusted EBITDA less (i) capital expenditures necessary to maintain its existing infrastructure and (ii) the cost to replace attrited accounts. Monitronics Non-GAAP Measures and Reconciliations March 2015